Schroder insists on spending cuts even after poll disasters

The German Chancellor, Mr Gerhard Schroder, insisted last night that his centre-left government will press ahead with an unpopular package of public spending cuts, despite the third electoral disaster for his Social Democrats (SPD) within a week.

In a state election in the eastern state of Thuringia, the party looked set to win less than 19 per cent of the vote, as the Christian Democrats (SPD) swept to victory with an overall majority.

The SPD's performance was its worst ever in the state and the party looked certain to fall into third place behind the formerly communist Party of Democratic Socialism. Still shaken after heavy losses in Brandenburg and the Saarland last week, the SPD are bracing themselves for further humiliation in Saxony next Sunday and in Berlin next week.

But Mr Schroder ruled out any changes to his plan to slash more than DM30 billion from public spending, most of it at the expense of old age pensioners and social welfare recipients.

"I will hold firm unswervingly to my course," he said.

The SPD's new general secretary, Mr Franz Muenterfering, acknowledged that voters were unhappy with the government's performance but he warned the opposition Christian Democrats that the battle for public opinion was not yet won.

"It is a clear message to the SPD, a lesson, a warning, a clip across the ear - whatever you want to call it. But it doesn't represent a swing of sympathy to the Christian Democrats. Potential SPD voters didn't go out to vote. But I'm sure there will be a better time. The game is not over and we're still wearing the yellow jersey," he said.

The SPD vote in Thuringia fell by more than 10 per cent to less than 19 per cent, while the CDU saw its share soar by almost 8 per cent to more than 50 per cent. The PDS took more than 21 per cent but in a development that was greeted with almost universal relief, the far-right German Peoples' Union failed to win any seats in the state parliament.

The far-right party is represented in two out of five state parliaments in the formerly communist eastern Germany but it polled only 3 per cent in Thuringia yesterday.

Both Mr Schroder's coalition partners in the Greens and the opposition Liberal Free Democrats failed to win any seats in Thuringia's state parliament.

The Christian Democrats' general secretary, Ms Angela Merkel, claimed that yesterday's result showed that voters in the east felt betrayed by the Chancellor's treatment of the region since he entered office almost a year ago.

"Chancellor Schroder took personal responsibility for rebuilding the east and he has done nothing for the people here," she said.

The SPD also suffered heavy losses in local elections in the industrial heartland of North Rhine Westphalia, Germany's most populous state and the party looked set to lose control of town halls in such traditional strongholds as Dortmund, Cologne and Duesseldorf. SPD insiders suggest that, if these results are replicated in next May's state elections in North Rhine Westphalia, the Chancellor's own position could be in jeopardy.

The recent spate of losses has changed the composition of Germany's upper house, the Bundesrat, making Mr Schroder's coalition of Social Democrats and Greens dependent on support by the opposition CDU.

"There are now two governments in Germany - an SPD/Green coalition in the Bundestag and an SPD/CDU coalition in the Bundesrat," according to the Hamburg-based political scientist, Prof Joachim Raschke.

Prof Raschke warned against writing off Mr Schroder's political future too soon and suggested that, as Germany's economic recovery progresses, the climate could be very different when North Rhine Westphalia votes.